One of the early angel investors in the troubled ed-tech firm Invact Metaversity, Gergely Orosz, has raised concerns publicly about the ongoing conflict between the company cofounders Manish Maheshwari and Tanay Pratap.
In an email to investors of the company,
Orosz said that Maheshwari wants ‘more equity than vested’. Maheshwari, the former Twitter India head, had earlier said he would leave the startup but has gone back on his words, Orosz alleged.
Pratap was also marked on the email.
Both the founders of Invact Metaversity, which began operations in October last year, have had differences of opinion over the vision and execution of the startup and had brought these issues before their investors last month. Orosz had previously tweeted that Maheshwari was holding the company hostage on Twitter.
Here’s the complete text of Orosz’s email:
Fellow angel investors in Invact Metaversity,
I am writing to you to share a sad situation and ongoing struggle with Manish Maheshwari, cofounder and CEO of Invact.
As context, I am an angel investor in the company and someone who has known it’s cofounder, Tanay, for some time. I invested in the company because of Tanay’s track record on building products, for teaching hundreds of students, and his high level of integrity. Some more details about me.
After receiving Tanay’s email titled “IMPORTANT: Disclosure of Invact Inc’s current status. For Angel Investors of Invact Inc.” on Sunday, 22nd May, I became worried about the company, and my investment. I got involved talking with both cofounders.
Tanay immediately responded and outlined the situation. Manish gave no details, no updates. He updated his LinkedIn and Twitter, sharing a story of the product failing – which I confirmed as not true – before emailing us, angels the same text.
I talked with employees and Tanay, and learned a few unsettling things:
– Manish lied to his team. He polled the team at Invact what the best next steps for the company should be on 29th April. The team suggested he leave, Tanay take over. Manish agreed he will do this. However, later walked back on his agreement. He told the team his principles don’t allow him to step down.
– Manish has been bullying Tanay into silence, threatening to use the company funds of $1.7M – including our angel investment money – to sue him, should Tanay speak ill of him in public. This broke the straw with me, as that includes my money: which I never invested to be used as an instrument of a cofounder bullying the other one.
– Manish keeps walking back on promises he made to named investors, then breaking them. Names investors were meeting the terms he put up to accept the exit settlement so the company can continue operating. He then walks back on these terms. He has been doing this for weeks. He blames this on his la
The situation of the company is this from what I observed:
– All employees have full trust in Tanay to take on the company and build their product that is impressive, given only 4 months of development. Internally, Manish praised the product, and the progress to the team, as I confirmed talking with employees. The team was shocked that Manish talked down their product in public, as he was preparing his exit.
– No current employees trust Manish to stay. They feel he has misled them too many times. I have talked with most of them to confirm this is the case.
– Named investors support Manish leaving the company on fair terms, and Tanay and team continuing to execute.
– Manish is keeping the company hostage. He controls the majority of votes and is refusing to sign agreements which he confirmed he would sign to leave. Named investors and employees all want him to leave, taking fair terms. In a strange way, everyone’s hands are tied until he steps down.
I decided to step in to see if I can resolve conflicts, using my public presence to get Manish to agree to a call.
Manish took a call with me to address the situation, where he lied to me, and walked back on our agreement shortly after. On this call – that I have recorded, fearing what would happen on Manish denying his words.
Manish said that the only thing keeping him from taking the buyout offer is if he gets to keep his vested shares. He said he does not want anything else: no cash, no nothing else.
I agreed to both remove my public mentions of him, and to help make this happen on the condition that he signs. The named investors updated the contract. I removed all public mentions. I kept my side of the deal.
Manish then refused to sign and walked back on all we agreed on. He now asks for more equity than he vested, a significant amount of cash – which he told me he would never do – and a board seat.
I have since learned Manish uses this tactic of agreeing, then walking back on his cofounder, the employees and the investors.
I am lost for words, and shocked at how the former Head of Twitter India does not honor his promises, and how he is only looking out for his own, personal interests. His actions are hurting investors – he wants to take our cash for himself – it’s hurting employees, and hurting future customers.
We are here: negotiations are frozen between named investors, after Manish walking back on an offer said would be good enough for him. The named investors are weighing the interest of the company, employees, investors and have offered a package that is more than fair, given the situation.
We are all waiting on Manish to act like a professional does: keep his word, and sign a deal he agreed he would sign.
I ask you to do at least one of this:
– Call Manish and ask him to act reasonably. Take the offered fair package that he has told me several times, in person, that he is happy with: his vested shares and nothing else. He has an agreement ready to sign. He has lost all support from his employees, misrepresented the value of the company, and is misleading named investors. Still, he asks for more shares than vested, cash – which the company needs – and a board seat to leave? All after confirming he will not ask for any of this? One that I have proof of that he said so.
– Call Tanay and offer him support. Tanay is not talking with anyone in public, fearing Manish suing him using our investor money, and bullying him emotionally. No one should have to go through this, not from their fellow cofounder. Not if that cofounder has a reputation like Manish had until now.
– Talk to names investors if you need more clarity. The namds investors are fully behind Tanay, and are also in shock at how unprofessional Manish is acting. Contact details for named investors are:
Hiran Embuldeniya ,
Nitin Sharma ,
Rajiv Srivatsa ,
Rahul Chandra
I will close with this quote:
“If you are neutral in situations of injustice, you have chosen the side of the oppressor.”
I trust that I have updated you on the situation sufficiently – even if the CEO of the company and the one controlling – and holding it hostage as we speak – has failed to do so.
Best,
Gergely
